- Gas tariff study and recommendations
- A North African Government ministry
- IHS CERA
- Three months
- Key MJM Staff and Associates:
- Mike Madden (Senior Consultant), Nick White (Research Director), Rowland Sheard (Senior Associate)
Gas Tariff Study and Recommendations
The purpose of the project was to provide a Government ministry with recommendations for the setting of gas tariffs for a developing market, with reference to the economic, competitive, development and socio-economic impacts of tariff design.
Building the team
We were sub-contracted to provide gas tariff specialist expertise as part of a wider IHS CERA consultancy project, so we built a team including internal resources, and associates with specific market development experience.
This study covered three main areas: explanation of the theory behind setting
tariffs, detailed case studies of gas tariffs in four countries, and recommendations
for tariff structure for client's market.
The theory section included a review of the structure of gas tariffs and prices around the world, analysing the principles and practicalities to tariffs (including price and incentive regulation and benchmarking, means of valuing the cost base and the cost of debt, and gas price options).
The case studies provided detailed reviews of tariff structure and its impact in Egypt, Algeria, the Netherlands and Russia. This required complex analysis of gas market data.
The final section included a series of recommendations drawing on the findings of the other two parts of the study and creating practical steps for implementation of effective tariffs in the client's market.
The gas tariff study was an integral part of a wider package of advice provided to the client by IHS CERA on gas market development.